Universities join forces on greener financial products

Edinburgh has joined 60 other higher education institutions and trusts to issue a Request for Proposals to financial institutions to invest in products with no ties to fossil fuel expansion.

The Request for Proposals aims to redirect financial investments to the construction of renewables and accelerate energy transition away from new oil, coal or gas projects.

A Request for Proposals (RFP) is a document from an organisation or group of organisations that outlines a project and asks for bids from prospective vendors that match a set of evaluation criteria.

It will solicit proposals from banks and fund managers for cash products, such as deposits and money market funds, that do not support companies engaging in fossil fuel expansion.

The joined-up approach emphasises the collective efforts higher education institutions can take to influence other sectors – including the financial sector – to change their behaviours and help combat climate change.

The RFP has been issued by the University of Cambridge, with the responses from banks and fund managers to be reviewed by any – or all – of the signatory institutions.

Alongside the University of Edinburgh, other institutions signed up include the Universities of Oxford, Leeds, Bristol and University College London.

Responsible investments

The extraction and burning of fossil fuels is a major cause of climate change, with banking playing a key role in financing fossil fuel production.

A large majority of primary financing of fossil fuels comes from debt – from sources such as bank loans and bonds.

While responsible investment is already more mainstream, the RFP will accelerate efforts by channelling money into energy transition away from fossil fuels, particularly in areas where finance is a key constraint for growth, such as in low-income countries.

As one of the first UK universities to complete divestment from fossil fuels, we are pleased to support this opportunity for banks and asset managers to put forward cash and money-market banking products that avoid the financing of fossil fuel expansion.

Using their influence and capital, universities have a significant role to play in the transition toward a net zero economy. We are proud to join other UK universities to support the Cambridge request for proposals for net zero-aligned banking products.

Sustainability progress

The University has set itself ambitious targets to address climate change.

In 2021, the University completed its divestment from fossil fuels, removing direct and pooled investments in companies involved in the extraction and production of fossil fuels.

This action is part of a range of activities the University is undertaking as part of its commitment to reach net-zero by 2040.

Other progress includes the creation of a sustainable travel policy and investment in programmes to improve the energy efficiency of the institution’s estate.

Related Links

Request for proposals: Cash and money market funds

Request for Proposals explainer | The University of Edinburgh

Zero by 2040 | The University of Edinburgh

Fossil fuel divestment | The University of Edinburgh

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